Estate of Jack D'Avila by Tiago D'avila, Administrator Ad
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Opinion
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4439-11T2 A-4705-11T2 A-4713-11T2
ESTATE OF JACK D'AVILA, by TIAGO D'AVILA, APPROVED FOR PUBLICATION Administrator ad Prosequendum; and DENISE ROCHA, individually, August 10, 2015
Plaintiffs-Respondents/ APPELLATE DIVISION Cross-Appellants,
v.
HUGO NEU SCHNITZER EAST; SIMS HUGO NEU CORPORATION; HUGO NEU CORPORATION; LYNCH, GIULIANO & ASSOCIATES, P.A.; JERSEY CITY MEDICAL CENTER, PATRICIA A. SCHRADER, M.D.1; AMY R. CUTSHALL, R.N.; CHRISTINE PANGILINAN, R.N.; CONCHITA GARCIA, R.N.; and LIBERTY SURGICAL ASSOCIATES,
Defendants-Respondents,
and
FEMCO MACHINE COMPANY,
Defendant-Appellant/ Cross-Respondent,
RIVERSIDE ENGINEERING,
Defendant,
1 Because all claims against Dr. Schrader have been satisfied, she did not participate in these appeals. and
HUGO NEU SCHNITZER EAST; SIMS HUGO NEU CORPORATION; and HUGO NEU CORPORATION,
Defendants/Third-Party Plaintiffs-Respondents,
SIMPSON & BROWN, INC.,
Third-Party Defendant/ Fourth-Party Plaintiff- Respondent/Cross-Appellant,
AMERICAN HOME ASSURANCE COMPANY,
Fourth-Party Defendant- Respondent,
WILLIS NORTH AMERICA, INC. (as successor-in-interest to Fleet Insurance Services, Inc.),
Fourth-Party Defendant- Respondent. ___________________________________
CONTINENTAL CASUALTY COMPANY,
Plaintiff-Respondent,
Defendant-Respondent,
2 A-4439-11T2 CRUM & FORSTER SPECIALTY INSURANCE COMPANY,
Defendant-Appellant,
Intervenor-Defendant/ Respondent. ___________________________________
CRUM & FORSTER SPECIALTY INSURANCE COMPANY,
Intervenor-Defendant/ Respondent. ____________________________________
Argued November 17, 2014 - Decided August 10, 2015
Before Judges Sabatino, Simonelli, and Guadagno.
3 A-4439-11T2 On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket Nos. L-3208-07 and L-3380-09.
Joseph P. LaSala and Richard J. Williams, Jr., argued the cause for appellant Femco Machine Company in A-4439-11 (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. LaSala and Michael J. Marone, of counsel; Mr. Williams and Mr. Marone, on the briefs).
Michael B. Zerres argued the cause for respondents/cross-appellants Estate of Jack D'Avila and Denise Rocha, individually, in A- 4439-11 (Blume, Donnelly, Fried, Forte, Zerres & Molinari, PC, attorneys; Mr. Zerres, on the briefs).
Scott C. Arnette and Ronald Betancourt argued the cause for respondent/cross-appellant Simpson & Brown in A-4439-11 (Betancourt, Van Hemmen, Greco & Kenyon, LLC and Arnette Law Firm, LLC, attorneys; Mr. Arnette, of counsel; Mr. Betancourt and Virginia A. Harper, on the briefs).
Gerard M. Green argued the cause for respondents Hugo Neu Schnitzer East, Sims Hugo Neu Corporation, and Hugo Neu Corporation in A-4439-12 (Law Offices of Gerard M. Green, attorneys; Mr. Green, on the briefs).
Catherine J. Flynn Tafaro argued the cause for respondents Amy R. Cutshall, R.N. and Jersey City Medical Center in A-4439-11 (Carroll, McNulty & Kull, LLC, attorneys; Ms. Flynn Tafaro, of counsel; Brad Baldwin, on the brief).
Michael R. Ricciardulli argued the cause for respondent Conchita Garcia, R.N. in A-4439-11 (Ruprecht Hart Weeks & Ricciardulli, LLP, attorneys; Mr. Ricciardulli, of counsel and on the brief; Sarah J. Gurka, on the brief).
4 A-4439-11T2 Abraham E. Havkins (Havkins Rosenfeld Ritzert & Varriale, LLP) argued the cause for appellant Crum & Forster Specialty Insurance Company in A-4705-11 and as respondent in A- 4713-11.
Nancy Lem argued the cause for respondent Continental Casualty Company in A-4705-11 (Colliau Elenius, attorneys; Ms. Lem, on the brief).
Michael A. Spero argued the cause for appellant American Home Insurance Company in A-4713-11, and as respondent in A-4439-11 and A-4705-11 (Eckert, Seamans, Cherin & Mellott, LLC, attorneys; Mr. Spero, of counsel and on the brief).
Margaret T. Korgul argued the cause for respondent Willis North America, Inc. in A- 4713-11 (K&L Gates, LLP, attorneys; Anthony P. La Rocco, of counsel; Ms. Korgul and Matthew S. Sachs, on the brief).
Ryan Milun argued the cause for respondent Simpson & Brown, Inc. in A-4713-11 (The Killian Firm, P.C., attorneys; Mr. Milun, on the brief).
The opinion of the court was delivered by
SABATINO, P.J.A.D.
This mammoth set of consolidated appeals and cross-appeals
involves over a dozen parties. The matter concerns both a wrongful
death case against multiple defendants tried over four months
before a jury, and a host of related insurance coverage issues
decided by the trial court.
The litigation stems from a workplace accident on a
construction site, in which a subcontractor's employee was struck
5 A-4439-11T2 on the head by an unsecured metal ladder and became paralyzed.
Following that traumatic injury, the worker received negligent
medical treatment, including the deprivation of sufficient oxygen,
causing him brain damage. He died three years later.
The worker's estate filed suit against the job site's owner
that served as the project's general contractor, several of the
worker's post-accident medical providers, and various other
parties. The owner filed separate claims for contractual
indemnification against both the worker's own employer and against
an installation subcontractor, alleging that each of them bore
responsibility for the hazard posed by the unsecured ladder.
Additionally, several insurers and an insurance broker whose
policies were implicated by the accident sought coverage rulings.
Because the exclusive remedy provision within the worker's
compensation statute, N.J.S.A. 34:15-8, does not preclude a
negligent employer's liability for contractual indemnification,
the trial court allowed counsel for decedent's employer to present
evidence and arguments at the jury trial. However, the court did
not allow the jury to consider allocating any percentage of fault
to the employer on the verdict form, despite the requests of
several parties, including the employer itself.
The jurors returned a multi-million-dollar verdict, which
they allocated in percentages among the owner, the installation
6 A-4439-11T2 subcontractor, and one of the defendant medical providers. The
trial court separately disposed of the related insurance coverage
issues without conducting any evidentiary proceedings.
Among the myriad issues presented to us, we have been asked
to consider questions relating to whether, and to what extent, an
injured worker's employer may participate in a jury trial of an
underlying tort action, in a situation where the factual
determinations could trigger the employer's duty to indemnify a
defendant in the tort case.
We hold that the trial court erred here in allowing the
decedent's employer to participate in the jury trial while
simultaneously disallowing the jury from ascertaining that
employer's percentage of fault, if any, on the verdict form. In
light of that error, we remand this matter to the trial court to
consider the need for further proceedings relating to such
potential allocation of fault to the decedent's employer.
The need for such further proceedings in this case will depend
upon whether the job site owner is continuing to press its claims
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4439-11T2 A-4705-11T2 A-4713-11T2
ESTATE OF JACK D'AVILA, by TIAGO D'AVILA, APPROVED FOR PUBLICATION Administrator ad Prosequendum; and DENISE ROCHA, individually, August 10, 2015
Plaintiffs-Respondents/ APPELLATE DIVISION Cross-Appellants,
v.
HUGO NEU SCHNITZER EAST; SIMS HUGO NEU CORPORATION; HUGO NEU CORPORATION; LYNCH, GIULIANO & ASSOCIATES, P.A.; JERSEY CITY MEDICAL CENTER, PATRICIA A. SCHRADER, M.D.1; AMY R. CUTSHALL, R.N.; CHRISTINE PANGILINAN, R.N.; CONCHITA GARCIA, R.N.; and LIBERTY SURGICAL ASSOCIATES,
Defendants-Respondents,
and
FEMCO MACHINE COMPANY,
Defendant-Appellant/ Cross-Respondent,
RIVERSIDE ENGINEERING,
Defendant,
1 Because all claims against Dr. Schrader have been satisfied, she did not participate in these appeals. and
HUGO NEU SCHNITZER EAST; SIMS HUGO NEU CORPORATION; and HUGO NEU CORPORATION,
Defendants/Third-Party Plaintiffs-Respondents,
SIMPSON & BROWN, INC.,
Third-Party Defendant/ Fourth-Party Plaintiff- Respondent/Cross-Appellant,
AMERICAN HOME ASSURANCE COMPANY,
Fourth-Party Defendant- Respondent,
WILLIS NORTH AMERICA, INC. (as successor-in-interest to Fleet Insurance Services, Inc.),
Fourth-Party Defendant- Respondent. ___________________________________
CONTINENTAL CASUALTY COMPANY,
Plaintiff-Respondent,
Defendant-Respondent,
2 A-4439-11T2 CRUM & FORSTER SPECIALTY INSURANCE COMPANY,
Defendant-Appellant,
Intervenor-Defendant/ Respondent. ___________________________________
CRUM & FORSTER SPECIALTY INSURANCE COMPANY,
Intervenor-Defendant/ Respondent. ____________________________________
Argued November 17, 2014 - Decided August 10, 2015
Before Judges Sabatino, Simonelli, and Guadagno.
3 A-4439-11T2 On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket Nos. L-3208-07 and L-3380-09.
Joseph P. LaSala and Richard J. Williams, Jr., argued the cause for appellant Femco Machine Company in A-4439-11 (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. LaSala and Michael J. Marone, of counsel; Mr. Williams and Mr. Marone, on the briefs).
Michael B. Zerres argued the cause for respondents/cross-appellants Estate of Jack D'Avila and Denise Rocha, individually, in A- 4439-11 (Blume, Donnelly, Fried, Forte, Zerres & Molinari, PC, attorneys; Mr. Zerres, on the briefs).
Scott C. Arnette and Ronald Betancourt argued the cause for respondent/cross-appellant Simpson & Brown in A-4439-11 (Betancourt, Van Hemmen, Greco & Kenyon, LLC and Arnette Law Firm, LLC, attorneys; Mr. Arnette, of counsel; Mr. Betancourt and Virginia A. Harper, on the briefs).
Gerard M. Green argued the cause for respondents Hugo Neu Schnitzer East, Sims Hugo Neu Corporation, and Hugo Neu Corporation in A-4439-12 (Law Offices of Gerard M. Green, attorneys; Mr. Green, on the briefs).
Catherine J. Flynn Tafaro argued the cause for respondents Amy R. Cutshall, R.N. and Jersey City Medical Center in A-4439-11 (Carroll, McNulty & Kull, LLC, attorneys; Ms. Flynn Tafaro, of counsel; Brad Baldwin, on the brief).
Michael R. Ricciardulli argued the cause for respondent Conchita Garcia, R.N. in A-4439-11 (Ruprecht Hart Weeks & Ricciardulli, LLP, attorneys; Mr. Ricciardulli, of counsel and on the brief; Sarah J. Gurka, on the brief).
4 A-4439-11T2 Abraham E. Havkins (Havkins Rosenfeld Ritzert & Varriale, LLP) argued the cause for appellant Crum & Forster Specialty Insurance Company in A-4705-11 and as respondent in A- 4713-11.
Nancy Lem argued the cause for respondent Continental Casualty Company in A-4705-11 (Colliau Elenius, attorneys; Ms. Lem, on the brief).
Michael A. Spero argued the cause for appellant American Home Insurance Company in A-4713-11, and as respondent in A-4439-11 and A-4705-11 (Eckert, Seamans, Cherin & Mellott, LLC, attorneys; Mr. Spero, of counsel and on the brief).
Margaret T. Korgul argued the cause for respondent Willis North America, Inc. in A- 4713-11 (K&L Gates, LLP, attorneys; Anthony P. La Rocco, of counsel; Ms. Korgul and Matthew S. Sachs, on the brief).
Ryan Milun argued the cause for respondent Simpson & Brown, Inc. in A-4713-11 (The Killian Firm, P.C., attorneys; Mr. Milun, on the brief).
The opinion of the court was delivered by
SABATINO, P.J.A.D.
This mammoth set of consolidated appeals and cross-appeals
involves over a dozen parties. The matter concerns both a wrongful
death case against multiple defendants tried over four months
before a jury, and a host of related insurance coverage issues
decided by the trial court.
The litigation stems from a workplace accident on a
construction site, in which a subcontractor's employee was struck
5 A-4439-11T2 on the head by an unsecured metal ladder and became paralyzed.
Following that traumatic injury, the worker received negligent
medical treatment, including the deprivation of sufficient oxygen,
causing him brain damage. He died three years later.
The worker's estate filed suit against the job site's owner
that served as the project's general contractor, several of the
worker's post-accident medical providers, and various other
parties. The owner filed separate claims for contractual
indemnification against both the worker's own employer and against
an installation subcontractor, alleging that each of them bore
responsibility for the hazard posed by the unsecured ladder.
Additionally, several insurers and an insurance broker whose
policies were implicated by the accident sought coverage rulings.
Because the exclusive remedy provision within the worker's
compensation statute, N.J.S.A. 34:15-8, does not preclude a
negligent employer's liability for contractual indemnification,
the trial court allowed counsel for decedent's employer to present
evidence and arguments at the jury trial. However, the court did
not allow the jury to consider allocating any percentage of fault
to the employer on the verdict form, despite the requests of
several parties, including the employer itself.
The jurors returned a multi-million-dollar verdict, which
they allocated in percentages among the owner, the installation
6 A-4439-11T2 subcontractor, and one of the defendant medical providers. The
trial court separately disposed of the related insurance coverage
issues without conducting any evidentiary proceedings.
Among the myriad issues presented to us, we have been asked
to consider questions relating to whether, and to what extent, an
injured worker's employer may participate in a jury trial of an
underlying tort action, in a situation where the factual
determinations could trigger the employer's duty to indemnify a
defendant in the tort case.
We hold that the trial court erred here in allowing the
decedent's employer to participate in the jury trial while
simultaneously disallowing the jury from ascertaining that
employer's percentage of fault, if any, on the verdict form. In
light of that error, we remand this matter to the trial court to
consider the need for further proceedings relating to such
potential allocation of fault to the decedent's employer.
The need for such further proceedings in this case will depend
upon whether the job site owner is continuing to press its claims
of contractual indemnification against both the decedent's
employer and the installation subcontractor. If so, additional
fact-finding might be required to sort out the priority or division
of the respective payment obligations of the two subcontractors
as co-indemnitors. Such supplemental fact-finding shall not,
7 A-4439-11T2 however, disturb the verdict already obtained by plaintiffs. We
reject the installation subcontractor's demand for a new jury
trial on all issues, particularly since that appellant failed to
object at trial to the employer's omission from the verdict form.
We also remand this matter for the trial court's further
consideration of certain discrete insurance coverage issues.
In all other respects, we affirm the trial court's rulings
and the final judgment predicated on the jury's verdict, thus
denying relief on the plethora of other issues raised on appeal
in the parties' twenty-three briefs.2
I.
We derive the following pertinent facts from the evidence
adduced during the lengthy jury trial. The trial spanned nearly
forty intermittent days between October 2011 and January 2012. We
describe the facts in considerable detail because those details
are legally significant to many of the assorted issues of
liability, indemnification, and insurance coverage raised on
appeal.
The Job Site and the Parties' Relationships
The decedent, Jack D'Avila, was a laborer employed by third-
party defendant Simpson & Brown, Inc. ("S&B"), a subcontractor on
2 We were informed several days ago that Femco recently reached a settlement with plaintiffs, a development which resolves some of the issues raised on appeal.
8 A-4439-11T2 a job site in Jersey City. The project involved the installation
of a 700-foot "mega shredder" at the facility of defendant, Hugo
Neu Corporation.3
Hugo Neu is a metal recycling company. At the Jersey City
location, Hugo Neu processed scrap metal and loaded it onto ships.
The mega shredder being installed on the site required a concrete
foundation, referred to in the record as the "mill base" or
"shredder base." The shredder's motor required a separate concrete
foundation, referred to in the record as the "motor base."
Although Hugo Neu disputed at trial its actual role concerning
the project, the proofs reflect that the company served as its own
general contractor. Hugo Neu obtained the necessary permits,
contracted with a variety of companies to perform the necessary
work, created a master schedule, and exercised "general
supervisory authority" over the project.
Hugo Neu contracted with decedent's employer, S&B, to serve
as a subcontractor for concrete foundations and structural work.
Hugo Neu separately arranged for another subcontractor, defendant
Femco Machine Company ("Femco"), to assemble and install the
shredder. Hugo Neu had worked with both S&B and Femco in the
3 The pleadings also identify affiliated companies of this defendant, specifically Hugo Neu Schnitzer East and Sims Hugo Neu Corporation. We shall refer to these entities collectively as "Hugo Neu."
9 A-4439-11T2 past. Another subcontractor, defendant Lynch, Giulano &
Associates, P.A. ("LGA"), was hired to perform surveying work on
site.
[At the direction of the court, the published version of this opinion omits this portion of Part I, which describes the ladder safety requirements and practices among the construction defendants.]
The Decedent's Accident
The accident occurred on May 18, 2005. The trial testimony
centered around determining who had placed ladders against the
motor base in the days leading up to the accident, a time frame
when Femco was preparing for installation of the shredder.
[At the direction of the court, the published version of this opinion omits Section 1 of Part I, which describes the testimony regarding the placement of the ladder in the days leading up to and on the day of the accident.]
2. The Ladder's Impact with Decedent
At approximately 3:45 p.m. on May 18, a ladder that had been
leaning against the motor base fell and hit decedent on the head.
Many of the witnesses agreed that the ladder most likely belonged
to S&B, because Femco did not have ladders that long, and Hugo Neu
did not provide ladders to the contractors.
Femco's employee John Padchin observed the accident while
climbing the ladder placed against the mill base. He testified
that he heard a "scraping" noise and observed the ladder on the
10 A-4439-11T2 motor base move as a strong "gust of wind" came through. Some
witnesses recalled that the weather had been nice that day, and
not particularly windy. However, others recalled it being a windy
day, and most agreed that the site tended to be windy due to its
location along the Hudson River.
S&B prepared an incident report, simply noting that the
accident had occurred and the nature of the accident. Nearly one
year later, an investigator for S&B prepared a somewhat more
detailed report indicating that decedent had been working in "a
shallow trench performing foundation work" at the time of the
accident. There was a "taller foundation next to the trench."
Leaning up against the foundation was a twenty-foot extension
ladder, which was not being used.
According to the report, the ladder belonged to S&B and had
been used by S&B personnel the previous day. The investigator
noted that "[t]he ladder was tied off at the bottom, but was not
tied off at the top, since the workers the previous day had
finished with the ladder and untied it before they came down."
The report reflects that S&B's project superintendent told the
investigator it was "not a particularly windy day, but for some
reason the ladder slipped from its position and came down on
[decedent]," and "[t]he ladder was still tied at the bottom when
it fell."
11 A-4439-11T2 [At the direction of the court, the published version of this opinion omits this portion of Part I, which describes the liability experts' competing opinions at trial.]
Decedent's Injuries and Medical Treatment
After he was struck by the ladder, decedent fell down, and
various workers on the construction site told him to remain where
he was until medical help arrived. He was conscious and
communicating, and apologized for getting hurt. The remaining
workers returned to their work.
Decedent was transported to defendant Jersey City Medical
Center ("JCMC") for medical treatment. In the emergency room, he
was able to speak and to move his hands, feet, arms, and legs,
albeit with difficulty, and with some loss of feeling.
Decedent had suffered spinal fractures at disc levels C2 and
C7. At level C3-C4, he had suffered bruising and swelling of the
spinal cord and a bulging disc. These injuries were causing
neurological damage, including partial paralysis, with the right
side more affected than the left. By the time decedent was seen
by a neurosurgeon, he could not move his right hand or leg.
The neurosurgeon performed a discectomy, removing the bulging
disk at C3-C4 to prevent possible worsening of the cord
compression. He also put in a plate at C3-C4, to stabilize
decedent's spine at that level. The medical records show no
reported complications with the surgery.
12 A-4439-11T2 Post-surgery, decedent was sent to the surgical Intensive
Care Unit, where he was under the supervision of defendant Patricia
A. Schrader, M.D., a trauma surgeon who also was director of the
unit. Defendant Christine Pangilinan, R.N., was decedent's nurse
from 7:00 a.m. to 7:00 p.m. on May 19. Defendant Conchita Garcia,
R.N., was his nurse from 7:00 p.m. on May 19 to 7:00 a.m. on May
20. Defendant Amy R. Cutshall, R.N., was his nurse from 7:00 a.m.
to 7:00 p.m. on May 20.
At the start of Nurse Pangilinan's shift, the doctor's orders
were for decedent to receive nothing by mouth ("NPO"). However,
decedent was later allowed ice chips only. At 10:15 a.m. on May
19, Dr. Schrader evaluated decedent and ordered that he could have
clear liquids and one can of a nutritional supplement three times
per day. Dr. Schrader also ordered that decedent be advanced to
regular food "as tolerated."
As to the paralysis, Dr. Schrader's notes from the May 19
evaluation reflect that decedent was able to flex both elbows, as
well as his left foot and left hip. However, decedent was not
able to flex his right foot or right hip.
On the morning of May 20, Dr. Schrader visited with decedent
and spoke with Nurse Cutshall about his condition. Dr. Schrader
noted that decedent's spinal cord injury appeared to be progressing
to quadriplegia, albeit incomplete. She also noted that decedent
13 A-4439-11T2 had lost the ability to move his fingers in order to utilize the
patient-controlled analgesia device (the "PCA").
Dr. Schrader had concerns about decedent possibly
experiencing respiratory difficulty, so she ordered a baseline
measure of his arterial blood gas, and that he be observed for
"increased accessory muscle use" when breathing, which would be
an early sign of respiratory distress. She did not consider
intubating decedent at that time, however, because he was breathing
on his own and had a good cough.
Dr. Schrader stated that she would not intubate a patient
unless it was necessary for the patient to breathe, or to protect
an unconscious person's airway. She explained that there were
risks to intubation, including possibly worsening the spinal cord
injury with the movements necessary to achieve intubation, as well
as infection or pneumonia.
Nevertheless, to minimize the risk of aspiration, Dr.
Schrader declared decedent NPO based upon swallowing difficulties
reported and demonstrated by Nurse Cutshall. Dr. Schrader also
ordered a swallowing evaluation, and that a feeding tube be made
available for possible placement into the patient.
At 9:55 a.m., about forty minutes after Dr. Schrader had
completed rounds with decedent, he experienced respiratory
distress. Nurse Cutshall heard him coughing, so she went to check
14 A-4439-11T2 on him. Concerned that he may be choking, the nurse suctioned his
airway, but it did not help. She also called for the doctor, and
Dr. Schrader returned to decedent's room.
At approximately 10:00 a.m., decedent's oxygen saturation was
down to 31 percent, whereas most people are at 97 to 100 percent,
and he had a heart rate of 45 beats per minute, indicating sinus
bradycardia. Dr. Schrader ordered that a call be placed for
anesthesia service to intubate decedent, and also prepared to
intubate him herself if necessary.
At 10:05 a.m., a nurse anesthetist was able to intubate
decedent on an emergent basis. A note written by Dr. Schrader
indicated that "blood tinged, beige material" was suctioned from
decedent's airway at the time of intubation. Dr. Schrader
testified at her deposition that there were different possible
sources of the beige material, including mucous from the lung.
On manual ventilation, decedent's oxygen saturation was
brought up to 100 percent, and his heart rate brought up to 118
beats per minute. However, he had suffered five-to-seven minutes
of oxygen desaturation, resulting in "anoxic brain injury."
Decedent's Remaining Life and Demise
Decedent spent the rest of his life in various healthcare
facilities, and he remained on a ventilator except for one week.
15 A-4439-11T2 He died in July 2008, at age fifty-one, after he suffered a
downturn and his family decided to discontinue the ventilator.
In their testimony, decedent's wife and children described
their losses due to his passing. They presented expert testimony
on damages, which was rebutted by experts presented by S&B.
The medical experts disagreed as to whether decedent's
respiratory distress occurred due to damage to his phrenic nerves,
caused by his spinal cord injury, or due to aspiration. They also
disagreed as to whether the nurses should have advised Dr. Schrader
sooner about decedent's difficulties with swallowing and operating
the PCA, and whether Nurse Cutshall had erred by demonstrating
decedent's swallowing difficulties during Dr. Schrader's rounds,
thereby adding more fluids and increasing the risk of aspiration.
The experts further disagreed as to whether Dr. Schrader had acted
appropriately in not intubating decedent until he suffered the
respiratory event, or whether she should have electively intubated
him earlier, during rounds.
Finally, the medical experts contested whether the initial
injury or the period of oxygen desaturation had caused decedent's
complete quadriplegia. They specifically differed as to whether
the period of oxygen desaturation had caused decedent's permanent
brain damage, or whether that damage occurred during a later event,
16 A-4439-11T2 when decedent suffered an extremely high fever of over 105 degrees
as a result of damage to his central nervous system.
II.
The Tort Action
In March 2007, Tiago D'Avila ("Tiago"), then-guardian for his
father Jack D'Avila, and Denise Rocha, Jack D'Avila's wife, filed
a complaint in the Law Division in the underlying tort litigation.
Their complaint was amended multiple times. Ultimately, the tort
action named as defendants: Hugo Neu; Femco; Riverside Engineering
("Riverside"); LGA; JCMC; Dr. Schrader; Nurse Cutshall; Nurse
Pangilinan; Nurse Garcia; and Liberty Surgical Associates
("Liberty Surgical"), one of Dr. Schrader's employers.
Plaintiffs asserted claims of construction negligence and
medical malpractice, wrongful death, and a loss of consortium
claim for Rocha. Riverside was later dismissed from the case on
summary judgment, a dismissal that no one contests on appeal.
Defendant Hugo Neu filed a cross-claim against defendant
Femco arising out of their contractual relationship. Hugo Neu
also filed a third-party complaint against S&B for contribution
and indemnification, and for breach of contract.
S&B denied liability and asserted that all claims for
contribution were barred by the exclusive remedy provision of the
Workers' Compensation Act ("the WCA"), N.J.S.A. 34:15-8. S&B also
17 A-4439-11T2 asserted a counterclaim and cross-claims for contribution and
indemnification.
S&B filed a fourth-party complaint against its insurer,
American Home Assurance Company ("American Home") and Willis North
America, Inc., as successor in interest to Fleet Insurance
Services, LLC ("Willis"). S&B alleged breach of fiduciary duty
and negligence against Willis, its insurance broker, for failing
to obtain the coverage S&B had requested. S&B also asserted breach
of contract and declaratory judgment claims against American Home,
seeking primary and non-contributory insurance coverage for Hugo
Neu under its policy.
The Declaratory Judgment Coverage Actions
In a related action, Hugo Neu's insurer, Continental Casualty
Company ("Continental"), filed a complaint for declaratory
judgment against American Home and Femco's insurer, Crum & Forster
("C&F"), seeking a declaration that those two insurance companies
were responsible for providing coverage for defense and indemnity
to Hugo Neu in the underlying litigation.
Both American Home and C&F asserted cross-claims against each
other and counterclaims against Continental. S&B intervened as a
defendant in the coverage action and filed an answer with cross-
claims.
18 A-4439-11T2 Pretrial Motions and Proceedings
On February 5, 2010, the trial court ruled on a summary
judgment motion filed by Continental. The court issued an oral
opinion, ruling that Hugo Neu was an additional insured under both
the American Home and C&F policies. In that same ruling, the
court consolidated the underlying tort case with the declaratory
judgment action. Several days later, the court entered an order
granting summary judgment to Continental as to the discrete issue
of Hugo Neu's additional insured status, and consolidating the two
cases.
After Continental moved again for summary judgment on
different grounds, the court4 issued an oral opinion on June 9,
2010, ruling that both American Home and C&F were responsible for
providing primary, non-contributing insurance to Hugo Neu.
On July 23, 2010, the second judge ruled on several other
pretrial motions. As it relates to the present appeals, the court:
(1) issued orders consistent with the June 9, 2010 rulings granting
summary judgment to Continental against American Home and C&F,
requiring them to "provide primary and non-contributing insurance
coverage (both defense and indemnification) up to the full limits
of coverage called for" pursuant to the construction contracts
4 A different judge ("the second judge") heard this particular motion.
19 A-4439-11T2 between Hugo Neu and, respectively, S&B and Femco; and (2)
dismissed claims against S&B, except that it required S&B to
provide "a complete defense and full indemnification" to Hugo Neu
pursuant to their contract, "so long as [Hugo Neu] was not found
to be solely responsible for Jack D'Avila's accident[,]" and
providing "that this contractual indemnification provision between
Hugo [Neu] and [S&B] shall not be triggered until the insurance
coverage provided by [S&B] has been exhausted." American Home and
C&F moved for reconsideration, which was denied.
In the meantime, Continental moved for the appointment of
defense counsel and to compel American Home and C&F to pay Hugo
Neu's defense fees and expenses. By order dated January 7, 2011,
the court denied that motion without prejudice.
After pretrial conferences, a third successive judge who was
assigned to this case ("the trial judge") heard and decided various
motions in limine. Among other things, the judge granted
plaintiffs' application to bar argument that decedent was
comparatively negligent and denied a motion to preclude S&B from
participating in the litigation. The judge reserved decision on
the question of whether the jury could consider S&B's negligence.
The Trial and The Verdict
Before the trial began, plaintiffs' counsel renewed his
objection to the court allowing the jury to consider the negligence
20 A-4439-11T2 of S&B. The court clarified that the parties could refer to S&B's
negligence in their opening statements to the jury, as it related
to the question of whether the negligence of the "construction
defendants" (i.e., Hugo Neu, Femco, and LGA) was a proximate cause
of decedent's injuries, but the jury would not be asked to assess
the comparative negligence of S&B on the verdict sheet.
Maintaining its prior ruling, the court denied a motion by Dr.
Schrader and JCMC to disallow S&B's participation at trial.
At the close of evidence, the parties made a variety of
motions, including motions for directed verdict, which the court
denied. The court also again considered whether S&B should be
placed on the verdict sheet, and determined that it should not.
S&B renewed its motion for a directed verdict, which the court
denied.
The jury found that Hugo Neu and Femco were each negligent,
and that their negligence was a proximate cause of decedent's
injury. The jury found no negligence on the part of LGA. With
respect to the job site accident, the jury allocated 75% liability
to Femco and 25% liability to Hugo Neu.
As for the medical defendants, the jury concluded that Dr.
Schrader, Nurse Cutshall, and Nurse Garcia were negligent.
However, the jury also found that only Dr. Schrader's negligence
had both increased the risk of harm posed by decedent's pre-
21 A-4439-11T2 existing condition, and had been a substantial factor in causing
his ultimate injury. The jury concluded that Nurse Cutshall's and
Nurse Garcia's negligence had increased the risk of harm, but had
not been a substantial factor in causing decedent's ultimate
injury. The jury found no negligence on the part of Nurse
Pangilinan.
Finally, the jury specifically found that 77% of decedent's
ultimate injury would have occurred even if the medical treatment
had been proper. Thus, it assessed Dr. Schrader as the cause of
23% of decedent's injury.
The net effect of these determinations, as molded by the
court, was to hold Femco 57.75% liable for the judgment, Hugo Neu
19.25% liable, and Dr. Schrader 23% liable.
As to damages, the jury awarded $2,249,668 in medical
expenses, $152,196 in lost income, and $3,800,000 in pain,
suffering, disability, impairment, and loss of enjoyment of life.
Decedent's wife (Rocha) was awarded: $50,000 for the loss of
consortium; $54,397 in past losses; and $334,150 in future losses.
Decedent's children (daughter Tienne and son Tiago) were each
awarded: $49,417 in past losses and $303,559 in future losses.
Finally, the jury concluded that Hugo Neu and Femco had not
proven that Dr. Schrader's negligence was an intervening,
superseding cause of decedent's ultimate harm.
22 A-4439-11T2 Post-Trial Motions
After several parties filed post-trial motions, the trial
judge issued a written letter opinion dated April 12, 2012. In
that decision, the judge reaffirmed the pretrial rulings that
obligated American Home and C&F to provide Hugo Neu with primary,
non-contributing insurance, and required those insurers to pay the
judgment against Hugo Neu. The judge also denied Femco's motions
to dismiss Hugo Neu's claim against it for contractual
indemnification, and further denied Femco's motion for judgment
notwithstanding the verdict or, alternatively, a new trial.
The judge further denied Dr. Schrader's motion to mold the
verdict so that only the so-called "construction defendants" the
jury had found to be at fault (i.e., Hugo Neu and Femco) were
liable. In addition, the judge required Femco to indemnify Hugo
Neu pursuant to their contract; and suspended prejudgment interest
on two-thirds of the award for medical expenses.
The Final Judgment, As Amended
The court entered an initial final judgment, in accordance
with the verdict and its post-trial rulings, and entered orders
on the post-trial motions, consistent with its written opinion.
Pursuant to the judgment, the total award, with prejudgment
interest, amounted to $8,534,726.27.
23 A-4439-11T2 Meanwhile, the court granted Continental's motion for payment
of interim defense fees and expenses, which was opposed by C&F and
American Home.
On June 11, 2012, the court entered an amended judgment,
adding modest taxed costs of $1,230, increasing the aggregate
judgment to $8,535,956.27, with $4,929,514.75 allocated to Femco,
$1,643,171.58 allocated to Hugo Neu, and $1,963,269.94 allocated
jointly to Dr. Schrader, Liberty Surgical, and JCMC.
The trial court thereafter entered a second amended judgment,
requiring American Home and C&F to provide primary and non-
contributory coverage for the judgment against Hugo Neu, and
requiring C&F to provide primary and non-contributory coverage for
the judgment against Femco.
The Myriad Appeals
The trial court stayed the judgment, conditioned upon the
posting of a supersedeas bond. Appeals were subsequently filed
by, respectively: plaintiffs, Femco, S&B, C&F, and American Home.
Plaintiffs subsequently settled with Dr. Schrader and her
employers, Liberty Surgical and JCMC.
III.
Femco, which bears the largest share of liability under the
jury's verdict, raises on appeal several interrelated issues of
negligence and contractual indemnification.
24 A-4439-11T2 Specifically, Femco argues that the trial court erred by:
(1) allowing decedent's employer, S&B, to participate in the trial
while disallowing the jury to consider S&B's alleged negligence;
(2) ruling that Femco was obligated to indemnify Hugo Neu for Hugo
Neu's own negligence. Femco further argues that the jury's
apportionment of fault against it was against the weight of the
evidence. The remaining issues raised on appeal by Femco were
resolved through its recent settlement with plaintiffs.
Meanwhile, the issues raised by S&B in its cross-appeal
include an argument that the trial court erred by denying S&B's
motion for partial summary judgment, and holding that S&B is liable
to Hugo Neu for contractual indemnification.
The first of these issues —— concerning the appropriate role
of decedent's employer in the jury trial —— raises important
questions of law and procedure about the employer's inclusion or
omission from the verdict form. We devote the following analysis
in this published portion of our opinion to that thorny issue.
Because these issues concerning the employer's role at trial
are closely intertwined with the issues of negligence liability
and contractual indemnification that also have been raised, we
include them within our analysis in this section of the opinion
as well.
25 A-4439-11T2 A.
The WCA, N.J.S.A. 34:15-1 to -142, "represents the bargain
that was struck between employers and employees concerning
workplace injuries, whereby employers shoulder the expense of
workers' injuries arising out of the performance of work duties."
Basil v. Wolf, 193 N.J. 38, 53 (2007). The WCA "provide[s] a
method of compensation for the injury or death of an employee,
irrespective of the fault of the employer or contributory
negligence and assumption of risk of the employee." Harris v.
Branin Transp., Inc., 312 N.J. Super. 38, 46 (App. Div.), certif.
denied, 156 N.J. 408 (1998).
As part of the bargain struck by the Legislature in the WCA,
N.J.S.A. 34:15-8 directs that an employer may not be sued by an
employee or an employee's surviving relatives for negligence that
caused injury or death to the employee. Instead, workers'
compensation is the exclusive remedy, absent proof of an
intentional wrong. Ramos v. Browning Ferris Indus. of S. Jersey,
Inc., 103 N.J. 177, 183 (1986); McDaniel v. Man Wai Lee, 419 N.J.
Super. 482, 489-90 (App. Div. 2011). Thus, plaintiffs in this
case could not proceed with a claim against S&B, decedent's
employer.
Case law establishes that the WCA does not, however, preclude
an injured employee from pursuing claims against third-party
26 A-4439-11T2 tortfeasors. Instead, "an employee retains the right to pursue
available common-law remedies for liability against third-parties,
so long as recoveries are not duplicated." McDaniel, supra, 419
N.J. Super. at 491 (citing Schweizer v. Elox Div. of Colt Indus.,
70 N.J. 280, 287-88 (1976)). Thus, plaintiffs could and did pursue
claims against alleged other tortfeasors, including Femco and Hugo
Neu.
Consistent with the WCA's exclusive remedy proviso,
defendants could not seek contribution from S&B under the Joint
Tortfeasors Contribution Law ("the JTCL"), N.J.S.A. 2A:53A-1 to -
5. "Because the employer cannot be a joint tortfeasor, it is not
subject to the provisions of the [JTCL], and a third-party
tortfeasor may not obtain contribution from an employer, no matter
what may be the comparative negligence of the third party and the
employer." Ramos, supra, 103 N.J. at 184; accord Stephenson v.
R.A. Jones & Co., 103 N.J. 194, 199 (1986); McDaniel, supra, 419
N.J. Super. at 492-93.
Hence, in the context of a plaintiff-employee's negligence
claims against other tortfeasors relating to workplace injuries,
the jury cannot be asked to apportion fault to the plaintiff's own
employer, even if that seems like "a more equitable manner of
presenting th[e] matter to the jury[.]" Jarrett v. Duncan Thecker
27 A-4439-11T2 Assocs., 175 N.J. Super. 109, 115 (Law Div. 1980); accord
Stephenson, supra, 103 N.J. at 199.
On the other hand, "indemnification of a third party by an
employer pursuant to an express contract does not disturb the
delicate balance struck by the Legislature in the WCA. Nothing
in the WCA precludes an employer from assuming a contractual duty
to indemnify a third party through an express agreement." Ramos,
supra, 103 N.J. at 191. Accord Mautz v. J.P. Patti Co., 298 N.J.
Super. 13, 19-21 (App. Div.), certif. denied, 151 N.J. 472 (1997);
Port Auth. of N.Y. & N.J. v. Honeywell Protective Serv., Honeywell,
Inc., 222 N.J. Super. 11, 19-20 (App. Div. 1987).
Thus, it was permissible here for Hugo Neu to seek
indemnification from S&B, pursuant to their contract, for any of
plaintiffs' damages caused by S&B or Hugo Neu. The only legal bar
to such a claim would be if Hugo Neu were found 100% liable,
because the Legislature has disallowed indemnification agreements
imposing liability where the damages in question were caused by
the indemnitee's "sole negligence." See N.J.S.A. 2A:40A-1.5
5 N.J.S.A. 2A:40A-1 states:
A covenant, promise, agreement or understanding in, or in connection with or collateral to a contract, agreement or purchase order, relative to the construction, alteration, repair, maintenance, servicing, or security of a building, structure, highway,
28 A-4439-11T2 1.
Published cases in New Jersey have provided mixed signals
about how the court should treat an employer named as a third-
party defendant, for contractual indemnification purposes, in a
tort action brought by an injured employee who has demanded a
trial by jury. In particular, the published cases have not been
uniform concerning whether the employer should be permitted to
participate in the jury trial and, if so, whether and how the
employer's alleged negligence should be addressed in the jury
charge and in the verdict form.
In White v. Newark Morning Star Ledger, 245 N.J. Super. 606
(Law Div. 1990), the plaintiff, an employee of Colin Service
Systems, Inc. ("Colin"), was injured while working on the premises
of defendant Newark Morning Star Ledger ("Ledger"). Id. at 608.
railroad, appurtenance and appliance, including moving, demolition, excavating, grading, clearing, site preparation or development of real property connected therewith, purporting to indemnify or hold harmless the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee, his agents, or employees, is against public policy and is void and unenforceable; provided that this section shall not affect the validity of any insurance contract, workmen's compensation or agreement issued by an authorized insurer.
[(Emphasis added).]
29 A-4439-11T2 Colin agreed in its contract with Ledger to indemnify Ledger for
any injury or death "in any way relating to the performance by
Colin . . . [of the contract] . . . except for such injury . . .
due to the affirmative negligent acts of Ledger[.]" Id. at 610.
The plaintiff sued only Ledger, alleging negligence, and Ledger
filed a third-party complaint against Colin for a defense and
indemnification. Id. at 609. Colin moved for summary judgment
to dismiss Ledger's third-party complaint, and the Law Division
judge denied that motion. Id. at 609, 613.
The Law Division judge in White recognized that if both Ledger
and Colin were found to be negligent and to have proximately caused
the accident, then "Ledger as the third-party tortfeasor [would]
be solely responsible" for the plaintiff's injuries. Id. at 611.
Hence, the case required an allocation of fault as between Ledger,
the defendant/indemnitee, and Colin, the third-party
defendant/indemnitor. Ibid. The judge further noted that there
was a genuine issue, at least on the facts presented in the summary
judgment record, as to "whether the cause of [the] plaintiff's
injury was solely caused by Ledger's negligence." Id. at 613.
The judge in White further concluded that, in deciding "how
best to allocate the liability as between Ledger, to the extent
that liability results from Ledger's affirmative negligent acts,
and Colin[,]"
30 A-4439-11T2 [t]he logical and most efficient means of achieving that result will be by proceeding as this case is presently structured, with both Ledger and Colin as parties. That will enable the same jury to fix the damages due from Ledger to [the plaintiff], while also fixing the amount due to Ledger pursuant to the indemnification provisions of the [contract].
[Id. at 611.]
The judge added that "[a]ny claimed confusion between [the
plaintiff's] right to recover from Ledger and Ledger's right to
recover from Colin can be avoided by instructions and
interrogatories to the jury." Id. at 613. The judge stopped
there, however. He did not indicate exactly how the jury should
be instructed, or how the special interrogatories on the verdict
form should be framed.
Our own court grappled with similar issues four years later
in Kane v. Hartz Mountain Industries, Inc., 278 N.J. Super. 129,
134 (App. Div. 1994), aff'd o.b., 143 N.J. 141 (1996). The
plaintiff in Kane was a construction worker who was injured on the
job, and he sued Hartz Mountain Industries, Inc. ("Hartz"), the
general contractor, and others, alleging negligence. Ibid. The
plaintiff's employer, Eastern Steel Erectors ("Eastern"), had
agreed to indemnify the steel fabricator with whom it had
contracted, Howell Steel, Inc. ("Howell"), "and the 'owner' of the
project from any losses or claims arising out of Eastern's work
31 A-4439-11T2 on the project." Id. at 135. Therefore, Howell joined Eastern
as a third-party defendant, seeking indemnification pursuant to
their contract. Ibid.
The trial judge in Kane allowed Eastern
to "participate" in the jury trial of plaintiff's case [but not present closing arguments], but he ruled that Eastern's negligence would be submitted to the jury only if the jury first returned a verdict finding that neither the Hartz defendants nor [another defendant] were negligent, and that Howell was 100% negligent. In that event, the court would require the jury to decide whether any negligence was attributable to Eastern, in order to determine the enforceability of the Eastern-Howell indemnification agreement.
[Id. at 146.]
Having been so instructed, the jury returned a no-cause verdict.
Id. at 136.
On the plaintiff's appeal in Kane, we concluded there had
been error in the jury charge on the effect of Occupational Health
and Safety Administration ("OSHA") regulations that warranted
reversal. Id. at 140-44. We also found reversible error in the
trial court's treatment of Eastern. Id. at 144-47.6 We observed
that "it was neither necessary nor appropriate to permit Eastern
to participate in the presentation of [the] plaintiff's case."
6 We rejected the plaintiff's separate contentions of error on an evidentiary issue and regarding comparative negligence, see id. at 147-51, which are not pertinent here.
32 A-4439-11T2 Id. at 146. Given that the nature of the allegations in the case
involved "industry-wide or regulatory safety standards," we
concluded that Eastern "would not be prejudiced by a separate
trial on the indemnification issue." Ibid.
Hence, we ordered in Kane that, on remand, "trial of the
third-party claim should be severed, as unquestionably any
liability of Howell is not so independent of the failure of Eastern
to abide by safety standards as to bring about the result that
Howell might be held liable without a similar finding of fault on
the part of Eastern." Ibid. We also observed that "[i]n any
event, Eastern, merely by reason of its status as indemnitor of
Howell, should not be accorded the advantage of participating at
trial. A bare agreement to indemnify does not carry with it the
obligation to defend, and it does not provide a right to control
the litigation." Id. at 146-47 (emphasis added). In making this
observation, we did not expressly repudiate White, a case which
we noted earlier in the opinion had been relied upon by the trial
court. Id. at 136.
Several defendants in Kane, including Hartz, Howell, and
Eastern, petitioned for and were granted certification by the
Supreme Court. The Court affirmed our disposition in Kane,
"substantially for the reasons expressed" in the published
opinion. Kane, supra, 143 N.J. at 142. In doing so, the Court
33 A-4439-11T2 provided no additional commentary and did not shed any further
light on the employer-participation question. Ibid.7
A year after Kane, we confronted similar issues of
indemnification in Bradford v. Kupper Associates, 283 N.J. Super.
556 (App. Div. 1995), certif. denied, 144 N.J. 586 (1996). In
that case, the plaintiffs were employed by Agate Construction
Company ("Agate"). Id. at 563. One plaintiff was killed, and
another injured on the job when both inhaled poisonous gas in the
Tuckerton sewer system. Ibid. They sued the Tuckerton Borough
Municipal Utilities Authority ("TMUA"), and Kupper Associates
("Kupper"), the project engineer, with Agate named a third-party
defendant based upon its contractual duty of indemnification.
Ibid. The jury returned a no-cause verdict, which we affirmed on
appeal. Id. at 563-64. However, we reversed the court's pretrial
ruling that Agate was not required to indemnify Kupper and the
TMUA. Id. at 564, 582-86.
Construing the indemnification provision within the
construction contract in Bradford, we held that the contract
"clearly did not require Agate to indemnify only for its own
negligence," but rather imposed a broader obligation. Id. at 584.
On the other hand, we recognized that the agreement did not require
7 The Court's very recent discussion of other aspects of Kane in Fernandes v. DAR Development Corp., __ N.J. __ (2015), did not address the employer-participation issue.
34 A-4439-11T2 Agate to indemnify either TMUA or Kupper "solely based upon their
exclusive negligence." Ibid. We also were persuaded that the
plaintiffs' claims in Bradford "arose or resulted from" the work,
as was required under the contract to trigger such a duty to
indemnify. Id. at 585.
Turning to the troublesome question of the appropriate role
of the plaintiffs' employer, Agate, in the fact-finding process,
we suggested in Bradford that Agate might be permitted to
participate in the trial. We ultimately did not reach that
question conclusively, however, because of the distinctive
procedural posture in which the case had been litigated and the
appeal had arisen. Instead, we enforced Agate's contractual duty
to indemnify TMUA, without requiring any further factual findings
on remand by a jury or otherwise:
The matter may be best resolved, as TMUA and Kupper sought here, by keeping the indemnitor in the case on the indemnification claim. But we need not now decide what the judge should have done had he denied Agate's motion. Rather, we have to determine what we must do in light of the fact that he granted the motion, and we must do so in view of the established record. Of particular importance are the [jury's] determinations that neither TMUA nor Kupper were found liable, although Kupper was found to be negligent.
Here, Agate chose not to participate by moving for a dismissal of the third-party claims. Rather, it sought to be relieved of an obligation to become involved in the trial proceedings.
35 A-4439-11T2 In these circumstances, taking account of the proofs that Agate violated OSHA regulations, and given a jury verdict finding neither defendant liable for plaintiffs' work- related injuries, we are unprepared to permit Agate to re-litigate the issue of negligence or whether either TMUA or Kupper can be said to be solely negligent.
[Id. at 586 (emphasis added).]
Thus, under the particular circumstances presented in Bradford,
we only remanded the case for "consideration of all the issues
regarding attorneys' fees and costs for which TMUA and Kupper are
entitled under the indemnification clause." Id. at 587. The
panel's comment in Bradford about how the participation question
"may be best resolved," id. at 586, although it is merely dicta,
arguably suggests a willingness to reconsider Kane's declared
prohibition on an employer/indemnitor's participation in the
negligence trial. We are mindful, however, that the panel's
comment in 1995 about that subject preceded the Supreme Court's
1996 unelaborated affirmance of Kane. We also are mindful that
our opinion in Bradford did not discuss Kane or, for that matter,
White, regarding the participation issue.
In a later tort case that we reviewed on appeal, Leitao v.
Damon G. Douglas, Company, 301 N.J. Super. 187 (App. Div.), certif.
denied, 151 N.J. 466 (1997), we noted there that the Law Division
had severed at trial a defendant general contractor's third-party
36 A-4439-11T2 complaint for contractual indemnification against the plaintiff's
employer. Id. at 190. After the jury found the contractor 51%
negligent and the employee 49% negligent, the trial court addressed
the indemnification questions. The court ruled that the
plaintiff's employer was obligated to fully indemnify the
defendant, despite the plaintiff's comparative fault. Id. at 190-
91. The court did so because the accident "arose out of" the
employer's subcontract and was not caused by the defendant
indemnitee's "sole negligence." Id. at 190, 195. Our appellate
opinion in Leitao did not consider, however, whether the employer
should have been permitted to participate in the jury trial, or
whether, in retrospect, the severance of the indemnification
issues was proper. Our opinion did not cite to Kane or White and
only cited Bradford with regard to a different issue. Id. at 192.
This line of published cases arguably leaves some residual
uncertainty about the proper way to proceed in these jury trial
situations where a tort defendant has a fact-dependent claim for
contractual indemnification against the plaintiff's employer, and
about the breadth of the approach we adopted in Kane. We are now
asked to consider in the present case —— one of truly massive
scope —— whether the impetus for a unitary proceeding here is
stronger than it was in Kane.
37 A-4439-11T2 The dimensions of Kane are distinguishable from the present
case, which is not just limited to construction accident defendants
and negligence claims but also includes medical malpractice
defendants and claims. Here, unlike in Kane, there was no
significant risk that the employer, S&B, would "control the
litigation." Kane, supra, 278 N.J. Super. at 147. In essence,
S&B was, metaphorically, another fish in a very large pond.
The sheer number of defendants and claims in this case compels
us to consider whether the approach adopted in Kane should be
inflexibly followed in large-scale cases, or whether, conversely,
the interests of judicial efficiency should take precedence and
warrant an exception to Kane.
2.
A few other state courts and treatise writers have grappled
with this perplexing issue. Our research has identified several
instances in which the plaintiff's employer took part in the jury
trial of the tort case, despite the workers' compensation laws of
the applicable state, in order to adjudicate third-party claims
brought by a tort defendant against that employer for
indemnification.8
8 See, e.g., Giguere v. Detroit Edison Co., 319 N.W.2d 334 (Mich. Ct. App. 1982) (allowing such indemnification claims to be tried before the jury along with the plaintiff employee's negligence claims against the defendant indemnitee, affirming the trial
38 A-4439-11T2 On the other hand, some jurisdictions have ruled that, under
an express contract of indemnity running from a plaintiff's
employer to a third party, "the third party cannot insist that the
employer and the employer's insurer be joined in the plaintiff's
action for purposes of enforcement of the right of indemnity." 11
Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law
§ 121.04[5] (Matthew Bender, Rev. Ed. 2014) (emphasis added)
(citing Gibbs v. Carolina Power & Light Co., 144 S.E.2d 393 (N.C.
1965) and Baldwin Co. v. Ceco Corp., 659 S.W.2d 941 (Ark. 1983)).
The Larson treatise recommends that "[s]ince the indemnity
claim is by definition a separate legal cause, and, unlike the
employer's contributory negligence, is not intertwined with the
tortious incident itself, every precaution should be taken to see
court's denial of the employer's severance motion seeking a separate trial on the indemnification issues); Frederickson v. Alton M. Johnson Co., 402 N.W.2d 794 (Minn. 1987) (permitting the negligence and the indemnification issues to be tried together, but granting a directed verdict to the employer before submitting the case to the jury); Severino v. Schuyler Meadows Club, 639 N.Y.S.2d 869 (N.Y. App. Div. 1996) (affirming a judgment following a combined jury trial on negligence and indemnification issues, in which the jury found the defendant/indemnitee general contractor 20% at fault for the accident and the plaintiff's employer 80% at fault); Berardi v. Getty Ref. & Mktg. Co., 435 N.Y.S.2d 212 (N.Y. Sup. Ct. 1980) (similarly involving a combined jury trial). By contrast, in Levine v. Shell Oil Company, 321 N.Y.S.2d 81 (N.Y. 1971), the parties stipulated that the plaintiffs' negligence claims against the defendant would be tried before a jury, and that the defendant's claims for indemnification against the plaintiffs' employer were to be separately resolved by the trial judge alone. Id. at 84.
39 A-4439-11T2 that the employee's own . . . rights are not prejudiced by the
interjection of this [indemnity] factor into his or her case."
Ibid. "This kind of tangle is at least partly avoided by [an
approach] which sees to it that the first step in the process, the
action by the employee plaintiff, goes forward without the
complicating presence of the parties and issues involved in the
indemnity problem." Id. at § 121.04[7] (emphasis added).
That said, the Larson treatise further recognizes that the
problem cannot always be "easily sidestepped," and that there can
be circumstances in which the negligence and indemnity issues
might need to be tried together. Ibid. As an illustration, the
treatise referred to situations in which an insurer for the
employer/indemnitor would not provide coverage for that obligation
unless the employer's negligence is proven to have caused injury.
In that scenario, the employer's carrier "would have an interest
in proving that the employer had not in fact negligently
contributed to the employee's injuries." Ibid.
3.
The preferred solution to this quandary concerning the
employer/indemnitor's proper role at trial, at least in a case
with large dimensions like the present one, is by no means obvious.
There are competing policies to consider.
40 A-4439-11T2 On the one hand, we recognize the important workers'
compensation policies that underlie the exclusive remedy feature
of the WCA. We also are mindful of the related desire not to
entangle an injured worker's employer indiscriminately in
negligence actions that the employee brings against other
tortfeasors. Those concerns seemingly weigh in favor of holding
separate trials or hearings on indemnification issues.
On the other hand, our system of justice also favors
consistency of outcomes, efficiency, and the avoidance of the
needless consumption of time and resources to litigation. See,
e.g., Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 522 (2006);
State v. Gonzalez, 75 N.J. 181, 190, 193 (1977). Those offsetting
considerations weigh in favor of attempting to resolve indemnity
issues, where possible, within the same trial or before the same
fact-finder.
We suspect that, in many instances, such as the present case,
a general contractor or project owner routinely will insist on its
subcontractors entering into broad indemnification agreements that
strive to insulate the owner or general contractor from liability
when one of the subcontractors' employees is injured on the job
site. Depending on the contractual language utilized, the proper
application of those indemnity agreements may require factual
findings as to: whether the employee's injury "arose out of" the
41 A-4439-11T2 work encompassed by the indemnity contract; whether the worker's
employer was at least in part at fault for the accident; and
whether the defendant indemnitee was not itself 100% at fault.
These factual issues can be very closely intertwined with the
liability proofs and the findings that a jury must make in the
underlying negligence case.
Where the parties in the negligence case have not agreed to
a bench trial, the jury's paramount function as fact-finder
generally ought to include those factual issues relative to
contractual indemnification. It could be exceedingly difficult
for a trial judge (who would not, of course, be privy to the jury's
deliberations) to attempt to adjudicate the proofs in an indemnity
proceeding in a manner that would respect the jury's findings but
still resolve the open factual questions.
For instance, what if the judge, upon hearing the evidence
in a "round two" indemnification trial or proceeding, perceives
from the testimony that the co-defendant seeking indemnity was not
negligent or only slightly negligent, despite the jury's earlier
finding imposing the greatest share of liability upon that
defendant? Or, what if the judge perceives that the defendant
seeking indemnification from the plaintiff's employer bears a much
higher percentage of fault in causing the accident than the level
42 A-4439-11T2 ascribed by the jurors? This predicament, and the risk of
inconsistent outcomes, is surely troublesome.
Moreover, a separate trial or proceeding on indemnification
will invariably consume lawyer time and expense, expert time and
expense, witness time, and other resources already expended in the
earlier negligence trial. Why should a plaintiff, having already
tried the tort case to verdict, need to become entangled in another
proceeding, one that only involves the business-driven contractual
agreements between his or her employer and another private party?
We have considered the possibility that the factual proofs
might be presented simultaneously before the jurors for purposes
of the negligence claims and defenses, and for the judge, for
purposes of the indemnity issues. Such a "split fact-finder"
approach still can pose several disadvantages, however. For one
thing, the indemnitor or the indemnitee might have demanded a jury
on the contractual issues. Even if no such jury demand were made,
the employer/indemnitor has an advocacy interest in presenting
evidence, cross-examining opposing witnesses, interposing
evidentiary objections, and making arguments during the course of
the trial. It might be difficult to explain to jurors what role
counsel for the employer is actually performing at such a trial
before "dual" decision-makers.
43 A-4439-11T2 In addition, the judge serving as the fact-finder on the
indemnity issues may have questions or need clarification about
testimony as the case unfolds. This will place the judge in the
difficult position of either letting those queries go unanswered,
or interfering —— perhaps too often —— with counsel's presentation
of the case to the jurors.
Taking all of these competing concerns into account, we hold
that the sounder practice —— in a context such as the present one
involving claims even more extensive than those in Kane and an
unusually lengthy trial —— is to try the negligence and contractual
indemnification issues simultaneously before the jury. After the
evidence has been presented at such a trial, the court should
issue carefully-crafted jury instructions, addressing the pivotal
factual issues that the jury must decide. The verdict form will
likewise need to be carefully designed, so as to only have the
jurors address the question of the employer's potential fault when
it is absolutely necessary to do so.
For example, the jury must be instructed that they should
only consider the employer's negligence if they first determine
that the conduct of the defendant seeking indemnity is not the
sole cause of the accident. Jurors will be presumed to follow
such instructions faithfully. See Belmont Condo. Ass'n, Inc. v.
Geibel, 432 N.J. Super. 52, 97 (App. Div.), certif. denied, 216
44 A-4439-11T2 N.J. 366 (2013). In this way, the unified trial process will not
subvert the policies and objectives underpinning the exclusive
remedy provision of the WCA. This unitary fact-finding model
avoids discordant results and may conserve the resources of the
parties and the court.
The jury should be given appropriate instructions about the
presence of the employer's counsel in the trial, explaining that
he or she is participating solely with respect to certain factual
issues that the jury might need to address. The jury should not
be given an "ultimate outcome" instruction divulging that the
plaintiff cannot recover any damages from the employer, for we
suspect such an instruction would likely engender confusion and
speculation.
The judge must mold the verdict after it is issued, so that
the plaintiff's damages are not reduced by the employer's
percentage share of fault, if any. Instead, the non-employer
defendants must fully bear any liability owed to the plaintiff.
Thus, for example, if the jury finds defendant "A" 60% at fault,
another defendant "B" 20% at fault, and the plaintiff's employer,
defendant "C," 20% at fault, with no comparative fault accorded
to plaintiff, the employer's 20% share must be divided among the
other defendants in a molded judgment that assigns a 75% share to
defendant "A" and 25% to defendant "B."
45 A-4439-11T2 We stop short, however, of prescribing that such a combined
jury trial on negligence/contractual indemnification issues also
address discrete factual issues bearing upon insurance coverage,
an option that was suggested to us at oral argument by one of the
insurance counsel. We also reject the related suggestion that the
jury should answer special interrogatories on the verdict form
resolving any additional factual disputes that relate to insurance
coverage.
In order to provide meaningful responses to such insurance-
related queries, the fact-finder presumably would want the benefit
of the advocacy of counsel who are respectively seeking or opposing
coverage. Such advocacy would call for insurance counsel to
participate in the trial itself, to present and contest evidence,
and to make closing arguments to the jury. The jury would
therefore need to understand coverage counsel's role in the case
and, presumably, the identities of their clients. That
participation would undoubtedly risk speculation by jurors about
the existence and levels of insurance coverage available to
defendants. It could easily taint the jury's findings on
negligence and the amount of any damages awarded. See N.J.R.E.
411 (generally excluding proof of liability insurance coverage in
cases involving negligence or other wrongful conduct). There is
also a real danger that the insurance coverage issues could
46 A-4439-11T2 dominate the jury trial, thereby misdirecting the focus of
plaintiff's negligence case.
We therefore limit our prescriptive holding to the
participation of counsel who represent the parties on the issues
of contractual indemnification (e.g., as between a general
contractor or owner and a subcontractor). We do not endorse
expanding the trial further to involve insurance issues or coverage
counsel. The coverage issues must instead be decided by the court
or, where a jury demand has been made by the insurers or the
insureds, by a separate jury.
We recognize that the procedural solution we have endorsed
is not perfect. Even so, we consider it the most superior of the
possible alternatives, at least for cases such as the present one,
involving a significantly greater scope than Kane. That said, the
parties are free to stipulate to a different process, provided
that the trial judge in his or her discretion finds such a proposed
alternative sensible.
We suspect that, as a result of settlements with some parties
and dispositive motion practice, the need for a combined
tort/contractual indemnification trial may prove to be infrequent.
In any event, we hope the direction that we have provided here
will be useful in those future situations when they do arise.
Although it is not our prerogative to do so, the Supreme Court may
47 A-4439-11T2 also wish to revisit whether the approach in Kane should be
followed in less complex settings.
B.
Before we apply these principles to the trial that occurred
here, certain threshold matters must be addressed to provide a
proper context. We first consider Hugo Neu's indemnification
agreements with, respectively, Femco and S&B, and the trial court's
interpretation of those agreements.
1.
In Femco's subcontract, it broadly agreed to indemnify Hugo
Neu for "any and all claims . . . arising, or allegedly arising,
from and out of (a) the work incident to or resulting from any and
all operations performed by [Femco] under or pursuant to any of
the provisions of [its subcontract]." Femco also agreed to
indemnify Hugo Neu for claims arising out of "(b) any injury to,
or death of, any person or persons . . . occurring wholly or in
part in connection with or resulting from the work or by reason
of any act, omission or negligence of [Femco][.]" Thirdly, Femco
agreed to indemnify Hugo Neu for claims arising out of "(c) any
breach or default hereunder by [Femco][.]" The subcontract
specified that all three of these indemnity triggers apply,
"whether or not any acts, errors, omission[s] or negligence of any
48 A-4439-11T2 of the [i]ndemnities [i.e., Hugo Neu] contributed thereto in whole
or in part[.]"
The trial court correctly held this indemnity language in the
Femco subcontract to be valid and enforceable. We further concur
with the court that this contract language was sufficiently plain
and unequivocal to require Femco to indemnify Hugo Neu for damages
caused by Hugo Neu's own negligence. See Ramos, supra, 103 N.J.
at 191-92 (requiring such provisions to be expressed in unequivocal
terms); see also Azurak v. Corporate Prop. Investors, 175 N.J.
110, 112-13 (2003) (same).
We reject Femco's argument that the "whether or not"
phraseology contained in the contract's indemnity provision
created a fatal ambiguity that limits its obligation to indemnify
Hugo Neu for its own negligence. Nor do we agree with Femco that
the indemnity language here is internally inconsistent. The only
limitation that applies stems from the statute, N.J.S.A. 2A:40A-
1, precluding an enforceable duty to indemnify a party that is
solely negligent, not applicable here.
In addition, we are unpersuaded by Femco's claim that the
"arising . . . out of" phrase in the contract's indemnity language
precludes Femco's duty to indemnify Hugo Neu for injuries that
were not shown to be proximately caused by Femco's conduct.
Applying a common and ordinary sense to that phrase, there only
49 A-4439-11T2 needs to be proof of "a substantial nexus" between the injury and
the activities encompassed in the contract. Vitty v. D.C.P. Corp.,
268 N.J. Super. 447, 452-53 (App. Div. 1993); see also Leitao,
supra, 301 N.J. Super. at 193.
For example, even if Hugo Neu were found partially negligent
for an accident resulting to some extent from its failure to
maintain the safety of a job site where Femco was working, the
indemnification agreement would apply. That is because of the
"substantial nexus" between the accident and the job site
activities encompassed by the contract, unless, as we have said,
Hugo Neu were found to be 100% responsible for the unsafe
conditions.
Hugo Neu's subcontract with S&B likewise contains broad
indemnity language. Stripped to its essence, the indemnification
clause provides that "[t]o the fullest extent permitted by law,"
S&B shall indemnify Hugo Neu "against claims, damages, losses and
expenses, including but not limited to attorneys' fees, arising
out of or resulting from performance of [S&B's work under the
contract], including, without limitation, any such claim, damage,
loss or expense attributable to bodily injury, . . . caused by the
acts or omissions of [S&B], . . . or anyone for whose acts they
50 A-4439-11T2 may be liable, regardless of whether or not such claim, damage,
loss or expense is caused in part by [Hugo Neu]."
This language clearly expresses that S&B must indemnify Hugo
Neu against all claims "arising out of or resulting from
performance of" S&B's work. The obligation applies, "regardless
of whether or not such claim, damage, loss or expense is caused
in part by [Hugo Neu]." The contract expressly identifies one
subset of such claims for which S&B must indemnify Hugo Neu
"without limitation," that is, claims for bodily injury caused by
S&B's negligence, or the negligence of any party for which S&B is
responsible.
Hence, under the clear and unambiguous terms of the
indemnification clause, S&B must indemnify Hugo Neu for decedent's
damages caused by Hugo Neu or S&B. As we have already noted with
respect to Femco's similar provision, the phrase "arising out of"
does not require a finding of proximate cause between a plaintiff's
injury and S&B's work. Rather, it is sufficient that there is
proof of a substantial nexus between the injury and S&B's work.
Vitty, supra, 268 N.J. Super. at 452-53. So interpreted,
decedent's injury here clearly "arose out of" his employer S&B's
work under the contract, because it is undisputed that decedent
was injured while performing such work.
51 A-4439-11T2 The trial court therefore correctly granted partial summary
judgment to Hugo Neu in ruling that S&B was obligated to indemnify
Hugo Neu pursuant to their subcontract, so long as Hugo Neu was
not found to be solely liable for the accident. We therefore
reject S&B's cross-appeal of that determination.
The indemnity issues are complicated here, however, by the
fact that Hugo Neu bargained for duplicative indemnity protection
from both Femco and S&B. Given that the accident had a substantial
nexus to the work of Hugo Neu, Femco, and S&B, and did not arise
wholly out of Hugo Neu's negligence, a question arises as to
whether Femco or S&B has a primary duty to indemnify Hugo Neu, or
whether those duties somehow should be equitably allocated,
assuming that Hugo Neu seeks to enforce its rights under both
indemnity agreements.9 See, e.g., Chamison v. Healthtrust, Inc.,
735 A.2d 912 (Del. Ch. 1999) (in which a corporation's director
had a right to be indemnified by two separate indemnitors, and in
which the court divided their indemnity obligations equally),
aff’d, 748 A.2d 407 (Del. 2000).
9 At oral argument on appeal, counsel for S&B asserted that Hugo Neu has "waived" its rights to seek indemnity from S&B. We have located no evidence of such a waiver in the parties' submissions. Indeed, Hugo Neu filed a brief opposing S&B's cross-appeal of the trial court's ruling obligating S&B to indemnify Hugo Neu.
52 A-4439-11T2 Although the parties have not briefed these precise issues
of overlap, it is conceivable that the relative shares of fault
of Femco and S&B may bear upon their resolution.10 No such
comparative findings were made by the jury here. As we have
already noted, the jury was not permitted to consider assigning a
percentage share of fault to S&B. We shall consider the
consequences of that omission, infra, in Part III(C).
C.
Given the circumstances, the trial court justifiably allowed
S&B's counsel to participate in this jury trial, despite the
objections posed at the time by plaintiffs' counsel. The issues
of contractual indemnification relating to Femco, S&B, and Hugo
Neu required several factual determinations, in which S&B surely
had an interest.
These issues included whether Hugo Neu was solely at fault
for the accident, in which case it would be entitled to no
indemnity from either Femco or S&B under N.J.S.A. 2A:40A-1. The
issues also included whether Femco and S&B were each at fault,
and, if so, to what extent, because those findings could bear upon
the relative potential indemnity obligations to Hugo Neu of both
10 We suspect that Femco and S&B have not squarely addressed this priority issue because they both incorrectly presume that they would need to be individually found at least partially at fault in order to have any duty to indemnify Hugo Neu.
53 A-4439-11T2 S&B and Femco. If, for instance, the jury found S&B to be
faultless, or that S&B's share of fault were less than that of
Femco, then Femco arguably might have had the paramount obligation
to indemnify Hugo Neu.
The trial court declined, however, to include S&B on the
verdict form and thereby allow the jury to "weigh in" on S&B's
role, if any, in causing decedent's accident. Such potential
fault was not a fanciful possibility, as the evidence could have
been reasonably viewed (consistent with certain opinions presented
by some of the liability experts) to support a finding that S&B
was negligent in allowing decedent, as its employee, to work in
an area with an unsecured ladder it may have owned.
Citing our opinion in Kane, supra, the trial judge declined
to place S&B on the verdict form out of an apparent concern that
doing so would be inconsistent with the workers' compensation
laws, and could unfairly interfere with plaintiffs' prosecution
of their claims against the other defendants. In this regard, the
judge issued the following explanatory instruction to the jury:
The plaintiffs may at some point have considered whether Simpson & Brown was negligent. As to that issue, I have ruled, as a matter of law, that the plaintiffs cannot sue Simpson & Brown for negligence in this case because it is unquestioned that Simpson & Brown was Mr. D'Avila's employer and the law does not permit that lawsuit to take place. So you're not going to be asked to assess the
54 A-4439-11T2 responsibility of Simpson & Brown in this case.
Simpson & Brown did participate in this case, as you know, but they participated for another issue which I, the Court, have to address later. It relates to a contract claim between Simpson & Brown and one or another of the construction defendants, and that's not for you to consider. Please don't speculate as to what that issue is.
Only counsel for S&B, Dr. Schrader, and Nurse Garcia opposed the
omission of S&B from the verdict form.11
Notably, Femco itself never asserted a position to the trial
court about the propriety of S&B's participation at trial, nor
concerning S&B's inclusion or omission from the verdict form.
Femco presented no argument on these subjects at the October 11,
2011 pretrial hearing, in the colloquy with the court when the
issue arose again on October 19, 2011 before opening statements,
or during the January 3, 2012 charge conference. Femco, which is
now being represented by different counsel on appeal, does not
explain why it was silent on this controversial subject before the
trial judge, although we presume it had some strategic reason for
being non-committal.
11 Hugo Neu initially took the position before the trial began that S&B should be on the form. However, after the proofs were presented, Hugo Neu withdrew its objection at the charge conference, because its counsel had "shifted [his] focus" during the trial to the other defendants, given the court's previous indication before opening statements that S&B would not be on the verdict sheet.
55 A-4439-11T2 For the reasons we have already noted in Part III(A), supra,
the trial judge's reluctance to include S&B on the verdict form
stemmed from legitimate concerns and a reliance upon our prior
opinion in Kane. Moreover, as we have also shown, the state of
law on this particular subject was muddled. Nevertheless, we
conclude that the court erred in omitting S&B from the verdict
form, having allowed S&B otherwise to participate fully in the
trial and be represented by two separate counsel (one as to the
job site accident and another as to the medical negligence claims).
It was simply improper to allow S&B to participate in one manner
without the other, and counsel have cited no authority endorsing
such an arrangement.
That said, we now must consider what to do about the verdict
form omission. Femco is the only party that is pressing the point
on appeal, hypothesizing that its percentage share of liability
might have been less had S&B been on the verdict form. S&B
acknowledges the omission was error, but contends that it was
harmless. Dr. Schrader, who had opposed S&B's omission, has
settled with plaintiffs, and Nurse Garcia, who also opposed the
omission, was not found liable. Plaintiffs, who had previously
resisted S&B's participation, simply urge that we not upset the
verdict or require them to participate in any second trial. Hugo
56 A-4439-11T2 Neu also opposes a retrial, despite having initially favored S&B's
inclusion on the verdict form when the issue arose before trial.
Notably, no party on appeal is arguing that Kane required
S&B, as decedent's employer, to be excluded from this trial. In
fact, the sole appellant that criticizes what occurred in the
trial court, Femco, advocates just the opposite: that we repudiate
"[t]he Kane court's admonition that an employer/indemnitor should
not be permitted to participate in its employe[e]'s personal injury
trial[.]" Citing Rule 4:30A (the single controversy rule), Femco
further argues that Kane's approach "unnecessarily suppresses" the
important "public policy in favor of disposing of all claims
against all parties in one proceeding." Instead, Femco advocates
that we adopt a more efficient approach that allows the employer
to participate, but with appropriate "jury instructions that
explain the parties' specific claims and how the jury may apportion
fault." Hence, Femco urges that the unitary trial approach,
sanctioned in White and mentioned in Bradford, be applied to cases
such as the present one.
Given that Femco did not advocate —— either before or during
the trial —— for S&B's inclusion on the verdict form, we do not
perceive a manifest injustice to Femco that needs correction. We
do not countenance a retrial of the entire case, which consumed
almost forty days before a jury.
57 A-4439-11T2 The "plain error" standard of review may be inapplicable here
because the error of S&B's omission was "brought to the attention"
of the trial court, albeit by other parties, see Rule 2:10-2. Even
so, we are not convinced that Femco was sufficiently prejudiced
by that error to compel a retrial.
With respect to Femco's now-resolved direct liability to
plaintiffs, we discern no prejudice from S&B's omission from the
verdict form. Femco's counsel strenuously advanced an "empty
chair" theme against S&B at trial. That strategy apparently failed
to persuade the jurors that Femco was blameless in the events
leading up to the accident.
We are unpersuaded that the jury would have exonerated Femco,
or would have been likely to find Hugo Neu more liable than the
25% allotted by the jury, had S&B been listed on the verdict form.
There is no equitable or legally compelling reason here to require
the entire case to be retried before a different jury, despite the
improvident omission of S&B from the verdict form now belatedly
being complained of by Femco. In Addition, Femco's recent
settlement with plaintiffs, in which plaintiffs' judgment against
Hugo Neu has been assigned to Femco, only strengthens the reasons
for not burdening plaintiffs with additional proceedings.
A lesser remedy may, however, be appropriate, depending upon
what Hugo Neu now intends to do with respect to its overlapping
58 A-4439-11T2 rights of indemnification against Femco and S&B. If Hugo Neu
still intends to pursue indemnification from both subcontractors,
pursuant to the terms of their contracts, a fact-based
apportionment of fault between Femco and S&B might well be
necessary to resolve their respective duties to indemnify.12
The jury trial unfortunately provided no guidance to compare
Femco's and S&B's roles, respectively, in connection with the job
site accident. That comparison is not amenable to being resolved
by our appellate review of transcripts from the jury trial, or by
remanding the matter to the trial judge for a review of his trial
notes. Instead, the comparative relative percentages of fault of
Femco and S&B —— assuming, arguendo, that they are needed to sort
out the overlapping indemnity obligations of Femco and S&B ——
cannot be fairly decided without testimony and credibility
assessments.
12 We do not resolve here whether the exclusive remedy mandate of N.J.S.A. 34:15-8, or related case law disallowing common-law contribution claims against a negligent employer, see Ramos, supra, 103 N.J. at 189, could affect the priority of duplicative duties to indemnify owed to Hugo Neu by both Femco and S&B. We also do not resolve whether those authorities could affect whether Femco could obtain reimbursement from S&B of any sums it might pay to indemnify Hugo Neu. These issues, conditional as they are in nature, have not been briefed. If necessary, the trial court may consider them on remand, in light of any arguments raised by counsel.
59 A-4439-11T2 Should Hugo Neu, therefore, maintain its right to be
indemnified by both Femco and S&B, then another proceeding may be
required on remand to sort out the respective degrees of fault of
Femco and S&B, as between one another. The percentage shares of
Hugo Neu, Femco, and Dr. Schrader owed to plaintiffs shall remain
undisturbed. The sole focus of such remand proceedings on the
issues of contractual indemnity, if they are needed, shall be
confined to a comparison of the actions and inactions of Femco
with the actions and inactions of S&B.
Because Femco, S&B, and Hugo Neu each requested a jury trial
in their pleadings, the remand proceedings shall be tried, if
necessary, before a new jury, unless, of course, the parties
consent to a bench trial. To reduce the costs involved and the
burdens imposed on the other parties who are no longer involved
in the case, counsel are encouraged to stipulate as much as
possible to undisputed facts, and to consider agreeing to have
much of the transcribed testimony from the first trial read into
the record.
We emphasize that the scope of this second proceeding, if one
is required, should be narrow. The damages awarded to plaintiffs
shall remain unaltered, for the reasons noted, infra, in Part
IV(A).
60 A-4439-11T2 IV.
[At the direction of the court, the published version of this opinion omits Part IV, which addresses additional claims of error relating to the jury trial raised by S&B and Femco.]
[At the direction of the court, the published version of this opinion omits Part V, which addresses numerous issues raised on appeal by two of the insurance carriers, specifically C&F and American Home.]
VI.
We have considered all of the other points raised on appeal
by the various parties and conclude that they lack sufficient
merit to be discussed in this opinion. R. 2:11-3(e)(1)(E).
Affirmed in part, vacated in part, and remanded in part. We
do not retain jurisdiction.
61 A-4439-11T2
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